§ 80a-14. — Size of investment companies.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC80a-14]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2D--INVESTMENT COMPANIES AND ADVISERS
SUBCHAPTER I--INVESTMENT COMPANIES
Sec. 80a-14. Size of investment companies
(a) Public offerings
No registered investment company organized after August 22, 1940,
and no principal underwriter for such a company, shall make a public
offering of securities of which such company is the issuer, unless--
(1) such company has a net worth of at least $100,000;
(2) such company has previously made a public offering of its
securities, and at the time of such offering had a net worth of at
least $100,000; or
(3) provision is made in connection with and as a condition of
the registration of such securities under the Securities Act of 1933
[15 U.S.C. 77a et seq.] which in the opinion of the Commission
adequately insures (A) that after the effective date of such
registration statement such company will not issue any security or
receive any proceeds of any subscription for any security until firm
agreements have been made with such company by not more than twenty-
five responsible persons to purchase from it securities to be issued
by it for an aggregate net amount which plus the then net worth of
the company, if any, will equal at least $100,000; (B) that said
aggregate net amount will be paid in to such company before any
subscriptions for such securities will be accepted from any persons
in excess of twenty-five; (C) that arrangements will be made whereby
any proceeds so paid in, as well as any sales load, will be refunded
to any subscriber on demand without any deduction, in the event that
the net proceeds so received by the company do not result in the
company having a net worth of at least $100,000 within ninety days
after such registration statement becomes effective.
At any time after the occurrence of the event specified in clause (C) of
paragraph (3) of this subsection the Commission may issue a stop order
suspending the effectiveness of the registration statement of such
securities under the Securities Act of 1933 [15 U.S.C. 77a et seq.] and
may suspend or revoke the registration of such company under this
subchapter.
(b) Study on effects of size
The Commission is authorized, at such times as it deems that any
substantial further increase in size of investment companies creates any
problem involving the protection of investors or the public interest, to
make a study and investigation of the effects of size on the investment
policy of investment companies and on security markets, on concentration
of control of wealth and industry, and on companies in which investment
companies are interested, and from time to time to report the results of
its studies and investigations and its recommendations to the Congress.
(Aug. 22, 1940, ch. 686, title I, Sec. 14, 54 Stat. 811.)
References in Text
The Securities Act of 1933, referred to in subsec. (a), is act May
27, 1933, ch. 38, title I, 48 Stat. 74, as amended, which is classified
generally to subchapter I (Sec. 77a et seq.) of chapter 2A of this
title. For complete classification of this Act to the Code, see section
77a of this title and Tables.
Transfer of Functions
For transfer of functions of Securities and Exchange Commission,
with certain exceptions, to Chairman of such Commission, see Reorg. Plan
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat.
1265, set out under section 78d of this title.
Section Referred to in Other Sections
This section is referred to in section 80a-6 of this title.
